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tv   Closing Bell  CNBC  January 24, 2013 3:00pm-4:00pm EST

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acre estate with a pool and eight-bedroom house. this $19.75 million property comes with two old-fashioned barns so you can remember what the hamptons used to be like before all the money came in. back to you guys. >> very quickly, robert. how many of these deals are all cash? >> almost all of them. basically what happened is the sellers came -- the buyers came with all cash and said, look, if we can do this deal before january 1st what kind of price will you give me? a lot of discounts. discount being relative so almost everyone i talked to it was all cash. wow. >> robert frank, thank you very much, sir. >> thanks. >> let's go from the hamptons to their 2 wine because today's sign of the times has people screaming what the chuck? trader joe's is getting a price increase. a bottle of their bargain wine will now cost 2.49, up from 2 bucks. apparently it was a bad season for california vineyards so pay up a little bit for two buck
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chuck. dow up again, 45 point right now. thanks for watching "street signs" live from the new york stock exchange. "closing bell" is up next with at least one big-time two buck chuck drinker. mandy, you'll have to pay up a little bit more. and we welcome you to the new york stock exchange on "closing bell." i'm bill griffith here. the dow was up 100 points today. we had this rally continuing here, but we have come off those highs. we'll see what we can do in the final hour of trading here. >> we'll see what we can do. i'm mandy drury. standing in for maia. she will be joining us nonetheless very soon from davos speaking with citi ceo michael corbat, the first interview since the controversial exit of his predecessor vikram pandit.
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>> look to that very much. plus a rare interview with controversial billionaire george soros and house majority leader eric cantor is in davos talking about u.s. debt issues and seems to be laying down the gauntlet for the next fight with president obama so we look forward to some very high-profile interviews coming up. >> and guess what our stock of the day is, yeah, you guessed it. it's apple. that stock is down nearly 11%, nearly 12% right now. first gets worse for the iconic company. overdone, a little overexaggerated, all this selling and how much of this has to do with the loss of steve jobs? >> we'll keep an eye on that for you. keep an eye on the major averages. here's how we stand. the dow was up about 100 points at that peak there. then we started to move lower, and you started to get sweaty palms among bulls. what does this mean? if we close lower, that might not be good. started coming back and now a gain of 44 points. another one of those days where any positive close is another
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five-year high for the trials going back to the fall of 2010. we're at 13,823. the nasdaq though is going the other direction. blame apple which is 13% of the nasdaq these days. it's down 24 points, the nasdaq is at 3129, and the s&p is up. nope, now it is lower. we're down a fraction right now at 1494 so that streak could come to an end if we don't get more buying coming in here. >> even if we are off the highs of the day, the dow is set for another gain as it continues its march towards a new old-time high but who would have thought works would have thunk we could be talking about a new all-time high even as apple stock continues to descend? take a look at how the dow has climbed while apple sinks lower and lower off the top of $705 per share. remember that back in september of last year. >> i do. >> when it reached its record high. >> for a while, apple was the bellwether for the stock market. >> it was. >> it led the way, but that's not the case now, so we pose the
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question, what happens from here? joining us at the new york stock exchange, danny huse from divine capital and josh brown is out there in the ether somewhere. cnbc contributor from fusion analytics. an crew keene from keene on the markets and our friend from o'neill securities on the floor. josh brown, is apple no longer important to the broader market? >> never important to the dow, but in terms of it being a leadership stock, i don't think we could say it's been leading the market since at least october or november of last year. i think what you're seeing today and yesterday in dow stocks, things like ibm, exxon mobil, it's really a different world from apple entirely. i think what investors want to do here is focus on the fact that we've got this mcclellan oscillator up at 112, as high as 150 yesterday, a fancy way of saying the advancers are outpacing decliners by a very healthy margin, and that's exactly what you would want to see if you want to stay constructive on this market. you want to seat leadership
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narrow. >> i haven't heard the mcclellan os calculator cited in a while. >> still matter. >> i'll hear from tom mcclellan at some point but what you're saying is this market has been overbought? >> me? >> yes. >> the rsi on the spiders is actually touching a high that it hasn't seen since september of last year. >> right. >> which was a short-term market top, but what i am saying is you don't want to see leadership start to narrow. what you do want to see is the oscillator staying at these levels and the advance declines remaining healthy. want broad leadership. >> okay. we do seem to be having bit of a problem there. let's go back to the oscillators. danny, i want to get to you, should have been ladies first, that's the way it is on "street signs" anyway. >> my apologies. >> clearly the market is not being led by apple anymore. what's driving the market? >> it isn't anymore, but it was for a very long time. >> yes, it was. >> and we talked about apple as a bellwether for quite a long
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time. frankly, i think it's on sale, it's been on sale but the bears have been harping on it, as they have been on the stock market as well. the market has had an incredible rise despite some pretty pervasive economic indicators to the alternate. we're slowing down and seeing profit margins hit highs we haven't seen in a very, very long time, if ever, and, you know, despite that, nobody wants to hear from the bears. >> yeah. >> everyone is sick of the bears. the market is rising and everybody is putting their fingers in their ears and really we'll continue to see the bears still try to get something done, with you they haven't been able to. >> i will say we've had a few high-profile bears on this program who started changing their spots. >> they have. >> if that's the right metaphor. start throwing in the towel just saying i want to go with this. >> past couple of weeks. >> going with this as long as it goes but then i'm really going to sweat this one. >> and they are sweating. andrew keene, what are you doing with this market right now? >> i actually bought some apple today at 450, a great
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opportunity. i've been trading apple since it was $80. did they have a bad quarter? i don't think it was that bad. their ipad numbers were a little weak. their iphone was weak, cannibalizing their own products, yes, but a third of the market cap is in cash, they have $155 a share in cash. they have about $137 billion. they are in a show -- me phase right now. they need to do something, buy some stock back, buy a twitter or netflix which is now going to be 40% higher than yesterday. they are going to show-me phase. >> what would be the best thing you would like to see them buy? >> stock buyback. >> yeah? >> i want to see them buy twitter. twitter for 14 billion. that's done. they have 137 billion. what are they doing with it besides hoarding it? pay some money and do something with it. >> that is a lot of money. >> i want a stock buyback. >> you want to see a stock buyback. in terms of the general market though, i'll give credit for the term meltup. sitting around the multi-year highs, and yet it feels as if we could potentially stagnate
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around this mark. what's going to be the next big catalyst? >> well, you know, listen, i think we're going to churn right here, but the next big catalyst will be the macro issue. well through the earnings season. we have next week and it will start to pear itself down next week and then right into the fight over sequestration and all that. we've had the 6% move this month alone in three weeks. we had, you know, a 20% move off the last part of 2012, so this market is up 30%, 35%. you would clearly expect there's got to be some pullback so that it stabilized and really builds a foundation that. being said, i don't think it's going to collapse, by any stretch, but don't be surprised if the market weakens a little bit which just gives people a longer-term investors a chance to jump in. i think apple is certainly overdone to the downside. you want to see industrial-type names and construction names is really where you want to be. >> kenny, we've talked a lot
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lately about how the last hour of the day, we're lately seeing lots of buyers. can we consider that to be the smart money? what if that doesn't happen today? >> i would be the really get too excited about that today, whether or not it happens or doesn't happen. i actually wouldn't be surprised if we saw the market give a little bit back today just because it's been pushing and pushing and pushing higher. at some point it's got to take a breather. >> okay. i would be surprised if it did not do that today. >> i just wanted to chime in because i think kenny makes a really good point, and i agree with what he said. if you're bullish on this market you want to see a pullback. i think the best thing that can happen would be some fear reintroduced to the market and actually take a look at the vix today. starting to act up again. that would be very healthy. i don't think anyone that's bullish on this market -- >> still at 15. 13 is still so -- it's so complacent, isn't it, josh? >> look, a vix at 13 is still hanging justin bieber posters on her wall, without a doubt. let me say one.
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leadership in this market is coming from a very interesting place, energy. take a look at the xle, the top performing sector on the s&p since the first day of trading. look at the individual names and then look at some of the smaller names within energy, not just exxon and chevron. there is tremendous strength in those charts, and that's actually a very positive sign. it's a cyclical area, and you want to see leadership come from there, so i'm happy to see it and i'm actually pretty bullish on the group in general. >> energy has been an important leader for this market the last couple of years. >> sure has. >> folks, thank you. we'll see how this market responds in the final hour of trading and what it may mean for the future. we'll talk to you all later, thank you. >> indeed. we have been pairi iparing some early session gains. matter thompson, break it all down for us. the big movers, including a stunning move from netflix, right? >> reporter: netflix is really a standout in a market that's turned mixed today. the markets can't move above the key 1,500 mark and hold it
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without apple participating which is under pressure today because of its earnings report. moving in the opposite direction though shares of netflix, up more than 30%. the company back in october gave a very wide range as to what to expect during this quarter, and it surprised to the upside earning 13 cents a share. saw strong subscriber growth, 14 million ads, 2 million here in the u.s. so investors are applauding that news today. green mountain coffee, another stock to watch. short seller david ieinhorn mentioned something the coffee was too hot, green mountain is expected to be or said tonight stock he was referring to. he's assured that it performed very well in the fourth quarter, a couple of big movers that we're watching today. bill, back to you. >> have a cup of coffee and watch a movie on netflix. >> sounds like my friday night,
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but not really could havy. >> so i've heard. going on here. see how we trade in the last hour. the dow was up about 100 points. half that gain now. we'll see what we do as we go to the last hour of trading. >> yeah. coming up next, citi's new ceo giving maria his first interview since taking over the job >> there's a feeling on the part of investors your chairman is rubbing things. is it his way or the highway, or do you have the ability that you need to make to actually lead this firm? >> that's a little teaser, folks. stick around to hear the answer in an interview you cannot afford to miss. >> looking forward to that one. also ahead, heard an incredible move for netflix after posting blow-out earnings last night. hear from somebody who says the stock is poised to head even higher. and how is this for an earnings lineup, microsoft on slate, at&t, starbucks as well. all set to report after the bell today, and guess what? we've got full team coverage and instant analysis of all of those
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welcome back. citigroup's new ceo michael corbat has been under the microscope since taking the reins in september when vikram pandit suddenly stepped down. he's kept a low profile until now. maria caught up with him at the world economic forum in davos, switzerland. >> i'm sitting right now with the ceo of citi to talk about strate strategy, the new ceo michael corbat.
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nice to have you on the program. >> nice to be here. >> thanks so much for joining us. >> thank you. >> you're here in davos, traveling through europe. i want to get your sense of what's going on in terms of the global economy. how do you see things? >> sure. why don't we start in europe. europe remains a challenging place. i think that the actions that mr. draghi took have technically been very strong. i think they have put a safety net under the market, but i think the challenge, is and it's one of the big topics here, is how do we get growth back into these economies. fundamentally that's what we need to do, and i don't think there's a clear path to that but it will take some time. >> been a tough couple of years. >> yes, it has. >> let's talk about citi, you're repositioning the firm. how are you planning on doing that and what's the vision going forward? >> our strategy, maria, is really focused around a few of the big secular things going on in the world. globalization, urbanization and digitization. if you think of globalization, thinking of what's going on in the economy, most of the growth
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is coming from the developing countries. you look at 2008 to 2012, 45% of world growth came from china. a trend we're going to continue to see the next couple of years. the growth engines coming outside traditional markets. from urbanization, people moving towards cities, and i think as a company we often talk about the fact that we're in 100 countries. we really look at the world now as cities. 150 significant cities in the world. we match up well against those. >> and in the u.s., are you done cutting, or is there more de-leveraging and cuts to come? >> i think from a balance sheet perspective and a size perspective, maria, we're comfortable globally. we think we've simplified the company. we've streamlined it. we've shed $900 billion, approximately $900 billion of asset. we've shed 60 businesses, so we feel like our business mix is right, but, again, got to drive towards efficiency of making sure we've got the right balance between revenues and expenses, and we're going to be focused on that.
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>> a lot of people wonder what went on and why things were sort of noisy around your predecessor when vikram pandit stepped down. can you give us any sense of what went on? >> that's a conversation really between the board and vikram, and i wasn't involved in those conversations. what i will say is in the days following and all the noise, i think that the contributions that both vikram and john havens made to the firm were missed, and i think today the company's position, through a lot of hard work and tough decisions that they made. >> do you have the wherewithal and the tools to do what you really need to do to lead? there's a feeling out there, with all due respect, a feeling out there on the part of investors that the chairman is running things. is it his way or the highway, or do you have the ability to make the decisions you need to do to lead this firm? >> i've got the ability. we've got an active board, and our board is focused around good governance, but that doesn't mean their focus is on running the company. to me we've set the strategy and set the targets going forward,
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and we'll be held accountable as a management team and me as an individual with doing that. >> you've got a good relationship with michael o'neill, the chairman, and he's not telling you to do this, run the company this way? >> he's not. have a very good relationship. i know mike. we date back and did a lot of work together in city holdings so i think he knows what he's put in the chair. he's comfortable with that and has certainly empowered me to take the company forward. >> a friend of the program and comes on the show a lot, one of the investors who wants a dividend. does he call you at all? >> when i got into the job, there's a few things i wanted to be focused on. i said i wanted to get through budget and plan. which need to get through our c-card submission and the management team in place. in addition to that i went out and spent time with clients. i met probably with most or spoke with at a minimum our ten largest shareholders as well as spent time with our regulators so our investors are very
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important. >> do you feel that the industry is going to face structural change? it seems to me the entire industry, citi included, has been riding a wave of deregulation and globalization for years, economies looking inward and much higher regulation in terms of deregulation. how do you deal with that? >> you see an industry abandoning what they call the financial supermarket and be focused around a number of core businesses, announcements of people exiting gearing physical or certain business lines. we were fortunate i think that we started our work a few years ago, and i think that we've got the position, both grow graphically and from a product perspective, where we want it to be. but i think you'll continue to see more of that, and i think in europe you'll continue to see more de-leveraging, ie shrinking on the bank balance sheets. >> it in terms of the volcker rule, how do you see that materializing and how does it impact citi? >> it's a work in progress and
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we supported dodd/frank in that what comes out of volcker gives us our ability to prioritize trading. >> you can't really define that so are we really going to see thimpmented? >> it's challenging, but we as a company left proprietary trading several years ago, so we're really comfortable in terms of what our business mix is and the ability to describe it. you're right. it is challenging. >> do you think going into the next quart their we're going to see more issues over europe? cat lifts coming. the italian elections. you've got the debt coming to in spain. what's your sense of where europe goes? >> spain did a big deal yesterday. was wildly oversubscribed so there's a lot of progress being made. i think that we're going to continue to take those issues one at a time as they come down the road. we've got big elections coming later in the year in germany so i think the market will go from issue to issue here.
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>> so good to have you on the program. thanks very much. >> michael corbat, ceo at citi. bill, i'll send it back to you. >> look forward to maria's next interviews as well. that one is key right there. the first opportunity for investors to get a sense of the new guy at the helm. >> what he's all about. >> very important banking position. heading towards the close. 40 minutes left in the trading session, and the dow is up 54 points. another new five-year high could be in the offing. >> indeed it could. >> let's take a look at shares of the netflix because this stock is trading like it's at the height of the internet bubble with shares up 43%. blowout earnings and now the company is trying to become more like hbo producing original programming. right now are you better off buying shares of time warner or netflix? >> one stock heading in the opposite direction of netflix is apple. is the company now feeling the
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effects of losing steve jobs? both sides that have debate still to come. stay tuned. much more to come. [ male announcer ] alka-seltzer plus presents the cold truth.
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well, netflix shares are really soaring after reporting a surprise fourth-quarter profit. julia boorstin is speaking exclusively to ceo reed hastings and joins us now with the highlights. what in particular caught your attention, julia? >> well, mandy, netflix ceo reed hastings tells me that this year is all about the company's investment in original content. he's going head-to-head with the cable giants, and he says that he can afford to pay up for the top movies and top tv shows. he also said that hbo is netflix's biggest competitor. >> developed soem so much content. look what they did with hbo go, way ahead of everybody else. just an incredible company, and the two of us will both produce a lot of shows. it will be a long time until we catch up with them in terms of emmys, but we definitely look at them in terms of inspiration. >> what's your strategy to compete with them?
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>> i'm an hbo subscriber and a lot of their employees subscribe to netflix. we both have different shows. both want to produce great shows and then we're like two different channels. they compete like two buddies running. >> netflix has been holding on to its big gains today which speaks to investors' confidence that the company will be able to lure in new subscribers with the original content it's investing in, original content like "house of cards" which does compete head to head with hbo. mandy? >> thanks very much. with today's rally, folks, shares have doubled in the past three months. you've heard me here. is it too late to get in, or are you better off with the media competition like time warner which owns hbo which netflix is trying to mimic in many ways? we have richard ross and on the fundamental side, hello jeff
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kilberg, also a cnbc contributor. which stock do you prefer, netflix or time warner? >> well, although we're seeing both of them rip through the 52-week high. i like netflix. what a sensational trade. i like them long term but averse to jump in today with the short sellers getting taken out to the wood shed. look at the lessons learned from netflix. 2011 the pricing distortion. really laid the groundwork, and they are focused, like julia said on content. they spent nearly 100 million smackeroos on this "house of cards" launching february 1st. that will draw more subscribers. the 33 million streaming subscribers, that continues to grow, so i'm looking for a pullback here on 130 to get in here because at the end of the day, mandy, we are seeing the way we watch tv or more importantly the way we want to watch tv drastically change moving forward. >> okay. is it looking to get in on pullback? what are the technicals telling us about these two stocks, rich?
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>> let's start with the cadillac here. you want to own time warner. bullish breakout today, when we bring up the chart, not just to a fresh new 52-week high but an 11--year high. that's exactly i want to buy. the bigger the base and the bigger the stock on the upside. you see the text bok head and shoulders in the context of the base. talking about netflix, you want to be streaming to the exits on this stock, on this 40% overnight gain. you bring up this chart. >> let me jump in, rich. rich, rich, you're talking about driving cadillacs. still probably pushing the knob on your zenith tv. they are transforming and evolving the way we look at content and are really focused on this international expansion. they have laid the groundwork. >> jeff, it's -- their biggest investment is in content called the requests house of cards." never invest in a company that
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invests like a house of cards. can't manage overnight risk and if you can't manage risk you're throwing darts at a board. we don't throw darts on a board. we bet on sure things. this netflix is a house of cards. sell it. >> couldn't disagree more, mandy. >> you know what, if you're going to use the car analogy, if time warner is the cadillac what kind of car is netflix? >> i think it's the bugati. >> netflix is like a tes. [ laughter ] you don't know if that thing is going to run out of steam in three miles or 30 miles. sell that thing. >> rich, i think the biggest difference with time warner cable, all they can do is offer the consumer a better price on internet. no innovation. not dead in the water but a lackluster year for time warner as you see netflix red box and all these other content providers online take over the space. it's happening right. >> content is king and in the
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five years you don't know how you're going to get your content but you know who is going to create it. >> guys. got to put a time-out on that one. great debate. great debate. cadillac versus the tesla or the bugati depending on how you look at it. the dow is up about 61 points right now. heading 30 minute before the close. we'll wait and see what happens in the last half hour. >> market is moving higher this last hour, critical last hour. what's in a name? apparently a lot for generic drug-maker watson pharmaceuticals. find out why it's completely changing their name. we'll speak with their ceo who is raising the closing bell coming up. here's a name most investors know. he made a fortune betting against the british pound and now is projecting a currency war. he says that and a lot more when maria speaks to him from davos. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong. tdd#: 1-800-345-2550 after that, it's on to germany.
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well, the merger last april of watson pharmaceuticals and activists created the world's third largest generic pharmaceutical company, and today that combined company loses the watson name and goes simply by the name actavis and
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will trade on the new york stock exchange under the trading symbol act. joining us now in a first on cnbc interview before he rings the closing bell here at the nyc is the ceo. great to have you with us. >> thanks for having me. >> back us through the rationale for this merger. >> it was to take watson from a large u.s. company and give it a global footprint. avtivas had a bigger global footprint and now we have access to 62 markets and the world. a fantastic opportunity. >> and when you talk about global footprint, you immediate a big generic global player. is that where it is? >> and we do around-the-world otc products, brand products and injectable products. >> here in the u.s. i keep reading how the blockbuster drugs going off patent are fewer and fewer every year so that market is not growing as fast as it is overseas. >> that's absolutely true. certainly less opportunities in the u.s. market for blockbuster
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opportunities, but this are many, many -- still a lot of opportunities in the u.s. markets so we're obviously very focused our r & d effort on those opportunities but globally there's great emerging markets for us to participate in. we're in russia. we're in southeast asia. australia. other not emerging markets but a great market for us. >> go easy, i'm from australia. go easy. how is this going to help you in terms of pricing by doing the merger? >> well, i think from a pricing perspective, if we're talking about cost of goods, we're able to leverage now our manufacturing operations across all those 62 markets. that drives down our cost, of course, and allows us to provide our safe and effective medicines at even a lower cost. >> you are -- you are in a unique position to give us a sense of where you see better economies around the world, and how do you see the u.s. economy right now. >> well, you know, i wish we had more certainty. as we look out with the uncertainty caused by some of the congressional situations that occurred, we'd hike to get
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more certainty. it certainly helps the bond markets, the financial markets. >> so financing your debt is more difficult when you have less clarity then, is that what you're saying? >> financed at very attractive rates. >> i would think so. >> but overall i think we would like to see certainty. the other thing, you know, from a corporate perspective, we'd love to see something done on the corporate tax rate here in the u.s. love to keep more jobs here. just got to find a way to solve that problem. >> how does obama care and the health reform affect you as a company? >> well, certainly it provides re people will be covered by prescriptions. that's great news for the entire pharmaceutical space. for our particular company, we don't focus so much on continuous care medicines. we generally focus on women's health, those kind of issues so for us not as great but for other pharmaceutical companies great opportunity. >> we'll let you go. they will be anxious to get you up to the balcony so you can ring the closing bell.
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your logo is green. why didn't you wear green? >> i wore green for him. >> you're australian? >> yeah, i'm starting to forget it. >> no idea. >> we're about to enjoy the close with 20 minute to go here, and the market is continuing to levitate a bit. >> absolutely. still marching closer and closer to a all-time high. really driving this rally? is it fundamentals or just the fed's easy money? that's coming up next. >> the big debate these days, and did the gop roll over on spending and cutting our debt. maria asks house majority leader eric cantor. that and much more exclusively coming up from davos. [ engine revving ]
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well, apple has been a huge drag on the nasdaq composite today. seema modi is over at the nasdaq market site with details. seema? >> reporter: hey there, bill. certainly the dog of the day. shares down 12%. the last time apple has fallen more than 10% on an intraday
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basis was the day of the flash crash back in may of 2010. concerns of future demand for apple products is hurting its component suppliers in the today trade as well. cirrus logic being affected and the stock behind the mobile appserie and that stock moving lower. qualcomm, a supplier to apple and altera reporting a 7% drop. demand for its older products came in lower than anticipated. to wrap it up, it's apple, suppliers and the chips weighing on the nasdaq. mandy? >> seema modi, will the markets nonetheless keep chugging along. the s&p and dow nearing all-time highs is this a fundamental story that has stocks rallying or simply a market being propped up by the continuation of easy money from the fed? >> well, we've got jeff cox, our
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guy from dotcom who says it's the fed. been saying that all along. ken sleeper of sierra core retirement funds and bob kaiser and are you saying both fundamentals? bob, what do you say? >> i think the answer is both. the fed and ecb propped up the market in 2012 and lately the economic data is looking brighter. retail sales in december, new all-time record for the month and initial jobless claims for the second week in a row 350,000. we haven't seen that since the first quarter of 2008 so you have a combination of both. >> ken? >> well. >> go ahead. >> we're seeing -- we've seen what you're talking about, but i think the fed is still the major factor that's driving the market higher, and for us though it's how you manage that move in the equity market. how do you control risk, the downside? we manage for absolute returns, so regardless we want to be on the conservative side when we need to be. >> here's my question for you, jeff cox.
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if it's the fed, why now? why are we getting this kind of a move now? i mean, the quantitative easing program has been in place for a few years now. of course, we've been going higher in that time, but now suddenly this market has started to improve and more when we got a little more clarity on the fiscal cliff, and we're getting all these earnings out that seem to be showing an improving economy. >> that's a good question, bill. i mean, this question over whether it's the fed is almost self-evident. last year the new york fed put out a report that says it's all about us. to answer your question, i just think we're getting this kind of crazy relief rally off of the fiscal cliff stuff and a little bit of clarity in washington and everyone has pushed the bad news to the back page, but, you know, two things you have to think about is when does the fed stop and why does it stop? now -- and that's going to come down to two questions. does it stop because the economy or improving or because inflation gets out of control? if it's the first reason, that's good. if it's the second reap, that's bad, and the people i talked to
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on wall street are getting much more concerned about the second reason and what happens if inflation get ahead of the fed and they are no longer -- they don't have that power anymore to control the markets. >> to that point, bob, do you have an estimate on when you think the fed might start to wind back? >> i know you can't hear jeff. he said at some point the fed will have to stop, for some reason the economy growing or a bad reason, inflation rearing up. what do you think is going to happen? >> the market knows it's never supposed to fight the fed and the latest round of qe3 is targeting the housing market so we've been saying at global market research for quite some time that the fed hats -- has gone all in for housing. existing home sales above the 5 million rate. dipped below that in recent tame but we're following more applications, mortgage applications to purchase homes
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and they have been going sideways for a long time now but the market is par tis pri. i think they think housing is going to break out to the upside the first half of the coming year. do you agree or disagree, ken? >> i take the point, but, again, i believe the fed says, they say that they are going to keep rates down to 2015 and they are buying across all levels of the yield curve, so i believe them, and i think that if we saw more economic output, if we saw more improvement, i think that we would see rising rates, and we're not seeing this. >> this assumes, jeff cox, that ben bernanke stays in the job while 2015. his job is up next year and the parlor games begin for who will replace him. >> i think it could be janet yellin, even murmurs of tim geithner moving over there. i'm a housing bull and i think the housing market has rebounded in spite of the fed, not because
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of the fed. the markets are afraid of when does the point come that it can no longer continue. >> certainly hope you're right on housing. thanks so much for joining us. >> thank you. less than 15 minutes until the closing bell. our good friend paul carsos will be rippinging it, up 60 point and we're holding on to gains going into the close. >> here's a question. was boeing warned years ago about the lithium batteries that have grounded the dreamliner lately. phil lebeau speaks to a man who says he was a whistleblower who was fired for ringing the alarm bells. >> and billionaire investor george soros says things aren't as good as he sees and why he sees another crisis around the corner from he speaks to mario have davos. >> in terms of wealth management and the word on the street, how
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surprised money moved into equities? do you think it's sustainable? >> one of the interesting conversations here in davos is what does the market see. the market right now, as we all know, was as high as it was at the peak of the internet bubble and the credit bubble if you take the s&p as an example and other market indices isn't too different. what does the market see and how is that possible? certainly doesn't feel like it did in the peak of those prior bubbles. hieve them. be happy to know that when it comes to your investment goals, northern trust uses award-winning expertise to lead you through an interactive investment process. adding precision to your portfolio construction by directly matching your assets and your risk preferences against your unique life goals. we call it goals driven investing. your life has a sense of purpose. shouldn't your investments? ♪ expertmatt find it at nort.
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turns out boeing may have been warned about the lithium batteries that may be behind all the issues with the dreamliner. phil lebeau joins us with the latest on this. phil? >> and, bill, got two pieces of news, the first one being that the ntsb completed an update with reporters regarding the ntsb investigation. here's a couple of notes, first of all, they say the battery short circuited and caught on fire but an important point. they are still trying to determine exactly why these batteries caught on fire. the bottom line, this was so serious they had to ground these planes. >> this is an unprecedented event. we are very concerned. as i mentioned in the very beginning, we do not expect to
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see fire events on board aircrafts. this is a very serious air safety concern the faa has taken. very serious action. >> and regarding those lithium ion batteries, today we spoke with a former worker and whistleblower. this is a supplier to boeing with the 787 dreamliners. they make the charger for the lithium ion batteries. he said he warned his superiors that the batteries were not safe and said the company ignored his warning. just a few minutes ago he described what happened when he saw one of these lithium ion batteries exemployed proceed. >> it wasn't even running and this lithium ion battery just decided to explode, and when thick exploded, the best way to describe it is where i was sitting, now there was an f-16 jet after burner shoos sho-- shooting out about ten feet where i was sitting and the
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magnitude of energy coming out of this battery, i cannot quantify it. >> us a take a look at shares of boeing since the 17th, which is when they were grounded by the federal aviation administration, we should point out that we've reached out to secure plane technologies for a comment regarding the concerns and not heard back from them. no closer to determining why these batteries malfunctioned and until that happens it's unlikely we'll see these planes cleared from this grounding. bill, back to you. >> crazy. phil lebeau, thanks very much for the latest on that. >> coming up next, the latest on the closing countdown. >> lose a little bit of altitude and stand by. these could be market movers, microsoft, at&t, minute away from reporting quarterly earnings. some of wall street's top analysts standing by to break down the numbers for you. you're watching cnbc, first in business worldwide. [ male announcer ] you are a business pro.
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all right. we're coming up on the three-minute mark here, and we are losing altitude again. the dow was up 100 points at the peak today. then we started to fall, and at the low, we were up around 18 points and then we started coming back, but now we're starting to lose it again. in fact, the s&p has just turned negative again and i will ask ben willis about that in a minute. earnings coming out after the bell, three big ones and microsoft is expecting 75 sense on the bottom line. at&t, they are expecting 45 cents, and for starbucks they are expecting 57 cents. first ben willis before i get to danny huse. you've been bullish. you're starting to feel maybe we're getting a little top heavy here. >> absolutely. no matter what you look at from a technical perspective 1495 on the s&p futures, not the cash market, that topped 1500 today. lining up for a falough. depending on what numbers you use. i'm not creating any longs in the major indices right now.
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>> do you agree? >> it's getting a little top heavy. we're seeing earnings come in that aren't as great as expected, and we're going to continue to see that start to feel more pressure, more pressure. >> want to blame a stock like apple for a top, that's fine. do whatever you want. i personally think we've had a great run. doesn't mean i'm not bullish. i just right i'm going to save some cash and keep my powder dry because i think you can buy them cheaper. >> how important is this top, in fact if we're but thing one in? >> it's a short-term event? >> still bullish going out to the end of the year but short term, you need the health of the market for us to continue to go high into the market. you need a pullback. >> and investors also think that the fed is backstopping this. don't forget we've had qe after qe after qe. what do they have to worry about? >> do you like microsoft? i want to see what happens today, but a i think that we're going to see a little problem with that, and we want to see


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